Insights and Opinions

 

Thursday, January 29, 2009

The State of Technical Recruiting in the Los Angeles Area

from Janine Davis





The most common question we're asked by clients and candidates is "What's going on in the market." Having been in business for 25 years, we've seen it all, boom and bust and everything in between, including 3 recessions. Up until November of last year, the Los Angeles tech market seemed to have a life of its own, independent of the rest of the country and other disciplines. There were ample contract and permanent opportunities, and the market remained candidate-driven. Come November, things slowed down, but did not stop. Certainly, many companies had layoffs and others eliminated open headcount; but the impression we have gotten from many clients across company size and industry spectrum is that they are in "Wait and See", versus "Stop", mode.

Now that we have entered a new year and a new era, clients are slowly creeping out of their shells. Existing clients are re-opening headcount, and new client referrals (where we thankfully get a vast majority of our business) are coming in. It remains a cautious and uncertain market; however, there are several key indicators that usually show themselves with a recession that are simply not coming into play, including:

1. More Junior Positions - positions such as Help Desk roles, junior QA positions, etc are what we fondly refer to as low hanging fruit. In bad markets, clients typically opt to fill these themselves, since it's comparatively easy to do so. However, we have maintained a steady stream of requests from our clients to fill these types of positions.

2. Candidate-Driven Market - although there have been many layoffs, and the resume boards are overflowing, the fact is that good candidates are still extremely difficult to find, and they continue to write their own tickets. The market is flush with candidates, but not necessarily the cream of the crop. Often when layoffs hit, it's a chance for companies to clean house. On the flip side, great candidates are reticent to leave their current positions in a shaky market, exacerbating the difficulty of finding solid talent.

3. Contract vs. Perm - Typically in recessions, there is a notable shift from permanent to contract placements. Thus far, we have not seen that shift occur. There is a distinct possibility that the shift will hit in the 3-6 month timeframe, as an aftermath of recent rampant layoffs. By that time, companies will realize that they actually have to get work done, but they will have no resources to do so. Contracting usually provides a quick fix, and is sometimes easier to get approved than FTE headcount.

4. Salary Dips - We have not seen a dramatic (or even a marginal) drop in permanent salaries, which historically accompany a bad market. They seem to be holding their own, though contract rates/margins are feeling the pinch.

It's difficult to draw a firm conclusion about what these indicators mean, because we have never had this particular combination of global economic issues across all industries. Los Angeles does appear to be in better shape than other cities, at least for those in technology. The future, however, is hard to predict. Best case scenario, the Wait/See game stops and things start to improve as the year progresses. Worst case scenario, the anomalies above shift towards a more typical response to a bad market, and we have to wait it out. But the overall feeling and movement seems optimistic and hopeful.

Janine Davis is Director of Operations at Technical Connections (www.technicalconnections.com). Technical Connections is an Information Technology executive recruitment firm that has been in business since 1984. The firm is locally focused, with clients in Los Angeles, Orange and Ventura counties, covering the gamut within technology, including applications development, infrastructure and all levels of management from Project Managers to C-level. The firm's clients include Fortune 500 down to first round start ups. You can contact Janine at jdavis@tci-la.com or at 310-479-8830.


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